How Much Money Does Google Make Via Youtube
Is Google making money off of YouTube? Of course it is! Loads of it.
Although there is no official finance sheets from Google, here’s a Wall Street estimate: Google is making a ton of money from YouTube.
More specifically: The video site should generate more than $3.6 billion in gross revenue this year, says Citi’s Mark Mahaney. After distributing some of that to partners, Google probably records net revenue of $2.4 billion, he says.
Mahaney is a longtime Google bull, and has been arguing that investors have been overlooking YouTube’s value in particular. Last year, he guessed at YouTube’s 2012 revenue, he thought it would do a mere $1.7 billion.
Why is he even more optimistic now?
Basically, because YouTube’s traffic continues to grow, even though it’s already terrific— Comscore has it posting 20 percent growth, quarter after quarter. And because Google is sticking more ads on more videos, Mahaney says in a note today.
YouTube’s is pushing the channels concept because they don’t think YouTube gets paid nearly enough for the eyeballs its delivers to advertisers. The intention is to make it look and feel more like TV and thus, draw more eyeballs.
But it’s already enormously valuable, Mahaney argues. For context: His 2012 revenue estimate “is likely 50% greater than Yahoo!’s Display Advertising total and right-in-line with Netflix’s total subscription revenue. We really doubt whether most investors realize how big/important YouTube has become.”
And you thought Youtube is for fun!